I am closing on a property on the 19th. The house is currently laid out as a 4 bed 3 bath. There is an office that has a closet and could convert into a 5th bedroom with the addition of a window. For layout aesthetics, I was going to enlarge one bedroom into that office. The part that I am struggling with is the closest comp found on an appraisal came in on the high side of 209k. I am planning on listing the house at $249k and don't want to fall short on the appraisal hence having to drop the price. Should I keep the current config of a 4 bd 3 bath and expand the bedroom or add another bedroom to add value to the appraisal, sacrificing room size? Thanks in advance.
I should also add a house 5 houses away that is only a 3 bd 2 bath and 500 less sq ft was on the market for 19days and is now pending. They were asking $229k, but they haven't closed yet so I don't know the sold price.
How much does it cost to add/convert the room? How much of the additional 40K do you get to pocket after the cost of labor material and commission? Does the market support that price?
Thanks for the input @Fay Chen ,
It should run $400 to add the window converting it to a bedroom. It will not be spacious but none the less a bedroom. The market has been trending up in this area and like I said with the house near by it should help if they come close to their asking price of $229k. I am having my agent pull comps to see how we will measure up. I just wonder how much value a bedroom will add going from a 4 to 5 bd. If I get close to my ask we should take home 53k after rehab, commissions paid and other misc. closing costs.
Best advice I can give is to aim at the larger market place. If the smaller 3-2 sold that fast, I suggest keeping the 4-3 count. Good luck.
In my area, bigger homes are harder to sell. The market seem to have resistance around 425K. So in my case, 5 bedroom would not add much value. In fact, my strategy has been to looking for big ugly homes in the area because not many people want it. So it depends on your market. Not sure if that helps.
Thanks @Jose Salcedo it seems like many homes in this market have been selling quickly. I have looked at the comps now and it looks like we should be able to list with the current configuration. I think that increasing the 4th bedroom will appeal to a potential buyer over adding another small bedroom. Looking at the appraisal it's almost like he tried to find the lowest possible comps and ignored the others. As long as we get a fair appraisal on the flip side I think we will do well.
Thanks for the advice @Fay Chen I would have to agree that there is not much difference in value with going from a 4 bed to a 5.
PS. I also look for the bigger ugly homes. Bigger the mess, bigger the reward.
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